Takeda, Lilly Say Prejudice Infected $9B Actos Verdict

Takeda Pharmaceutical Co. Ltd. and Eli Lilly & Co. argued Friday that the sheer size of the $9 billion punitive damages award they suffered in the bellwether personal injury trial over the diabetes drug Actos demonstrates the jury was inflamed by “passion and prejudice,” saying its verdict should be overturned.

Reported as the seventh-largest punitive damages award in U.S. history, the April verdictsustained claims by plaintiffs Terrence and Susan Allen that Actos manufacturer Takeda and its U.S.-based marketing partner Lilly concealed the risks of bladder cancer carried by the drug from physicians and consumers. The jury also handed $1.5 million in compensatory damages to the Allens.

With judgment yet to be entered, the companies mounted joint post-trial motions for judgment as a matter of law and for a new trial on Thursday, tossing out numerous grounds on which they say the verdict cannot stand. And they contended that even if U.S. District Judge Rebecca Doherty upholds the jury’s liability findings she must slash the punitive damages to comport with their constitutional due process rights.

The companies pegged the punitive award, which eclipsed the Allens’ compensatory damages more than 6,100 times over, to the jury’s desire to compensate other alleged cancer victims that the plaintiffs referenced at trial and to teach Takeda a lesson for not preserving internal documents surrounding the drug.

But neither evidence spoliation nor potential harm to other users of Actos can justify such a large award because under U.S. Supreme Court jurisprudence punitive damages cannot be based on conduct that did not directly cause a plaintiffs’ harm, according to the companies.

“The extreme size of the punitive damages awards, and the amount of time spent at trial on attacks against defendants’ character, reveal plainly that the punitive awards were not limited to conduct that caused plaintiffs’ harm, and were instead improperly based on conclusions about defendants’ character that are constitutionally forbidden,” the motion for a new trial said.

The motion for judgment as a matter of law, meanwhile, claimed that all of the claims fail because the plaintiffs presented insufficient evidence of causation and that Eli Lilly can bear no responsibility because federal law prohibits it from doing exactly what the plaintiffs claimed it should have done: beef up the warnings on the Actos product label.

Counsel for the plaintiffs was not immediately available for comment.

Assuming it stands, Takeda’s loss in the Allen litigation cements the drugmaker’s weakened position in the Louisiana MDL, considering Judge Doherty allowed the jury to hear evidence that the Japanese drugmaker had destroyed relevant evidence in bad faith.

Although the company has found success in state-court suits scattered around the country — going five-for-five on trials thus far, most likely because of the fuzzy science surrounding the direct causes of bladder cancer — Takeda still must reconstruct the lost evidence in the MDL at its own expense and contend with an exhaustive 115-page opinion on the spoliation that Judge Doherty issued after the trial.

The Allens had accused Takeda of hiding results of clinical studies it has known about since before the drug was approved by the U.S. Food and Drug Administration. Those studies show that using the drug causes bladder cancer, according to their suit.

Considering the relevant precedent on punitive damages, the Allens’ award is all but certain to at least be reduced, but it has already foreshadowed a possible fight between Takeda and Lilly over whether their marketing contract for Actos puts Takeda on the hook for Lilly’s share of any damages.

After the verdict came down, Takeda said it was reserving its rights to dispute whether Lilly’s claim that Takeda agreed to provide indemnification for losses in personal injury litigation. A $3 billion slice of the award fell on Lilly.

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